Insolvency Statistics and the Flood of Insolvencies to come
Insolvency industry watcher Peter Gosnell is reminded that the first sign of an impending tsunami is evidenced by the waterline receding. He was reacting to data showing a dramatic decline in insolvency administrations – down 55 per cent in June, with just 463 administrations, compared to the prior June at 1,040. The insolvency analytics report by Tony Sivaa also calculated industry-wide declines of 17 percent for April and 38 per cent for May, year on year, due to the impact of the COVID-19 stimulus packages.
“The numbers for the past three months lay bare the crippling effects on the insolvency sector”, advised Sivaa, who heads Sivaa Consulting, in his latest update. “There has been commentary that with the upcoming influx of insolvency appointments, there are not enough liquidators to do the work. But a significant portion of liquidators this last financial year did less than 10 appointments”, he noted.
The busiest of the 630 liquidators was Worrells, which had 757 files under its supervision – reflecting 8 per cent of market share. Cor Cordis followed with 424 files, followed by SV Partners with 401. Sivaa calculated that the top 20 firms nationally hold more than 50 per cent of all appointments among some 197 firms. NSW was the busiest for appointments with more than 3,250 filings.
Mackay Goodwin principal Domenic Calabretta had the highest number of files under management in 2019-20 with 162, followed by SM Solvency Accountants’ Brendan Nixon with 152.
Of the big four professional services, KPMG has the most registered liquidators, having swooped on Ferrier Hodgson. Worrell’s 30 liquidators, which is five less than KPMG, handled the administration of Italian restaurant chain Criniti’s as well as the recent collapse of Gold Coast international phone company Travelsim, which is to be wound up after a creditor vote last week.
Extracted from “Margin Call” column by: Jonathan Chancellor